What is potential or full-employment output?
A)the maximum GDP that an economy actually achieves throughout its entire history
B)the level of output achieved during periods when all of the labour force is employed
C)a target level of income determined by the government
D)the GDP that would be produced if the economy's resources were fully employed at a normal intensity of use
E)the GDP that could be produced if the economy's resources were fully employed at their maximum intensity of use

Question

Quizplus · Accepted Answer

Potential or full-employment output is the GDP that would be produced if the economy's resources were fully employed at a normal intensity of use. It represents the productive capacity of an economy when all the resources are being used efficiently. It is often used as a benchmark for measuring economic performance and growth.

What Is Potential or Full-Employment Output